Type: Loan | Category:
Business Loans

Strategic Growth Loan

Program Description

The Strategic Growth Loan (SGL) program is designed to help North Carolina life science product companies reach specific and meaningful milestones that will enable them to obtain further funding from investors and/or to commercialize their products. For most applicants, SGL awards of up to $250,000 will be matched by an equal or greater investment from one or more organized angel groups or venture capital firms. For certain exceptionally well-qualified applicants that have a larger matching investment from a top-tier life science investment group, an SGL award of up to $500,000 will be possible.

Eligibility

In order for a company to be eligible to apply for the Strategic Growth Loan, it must meet the minimum criteria below:

    • Have significant operating presence in North Carolina. To establish a significant presence, the company must (i) maintain its head office (where its books and records are kept, taxes are paid and senior management is located) in North Carolina as reported to the Secretary of State and/or (ii) conduct significant research, product development, or manufacturing activity in North Carolina.

    • Be engaged in life science research, development or manufacturing to develop a product or technology with commercial potential.

    • Have achieved a robust technical and commercially promising proof-of-principle of its technology for the intended product or application.

    • Have a committed, dedicated management team and a solid business plan.

    • Have valid license(s) to the relevant core intellectual property expected to be necessary for the company to commercialize its product or technology.

    • Obtain a commitment from an Angel Group or VC for an equity investment or loan at least equal in value to the amount being sought under the SGL. Matching investor(s) must have significant life science investing experience, conduct formal due diligence and be willing to share the outcome of this due diligence during the application process, and have additional funds set aside for future investments in the company.

    • Have completed all project(s) funded by any previously-awarded NCBiotech loan(s).

    NCBiotech determines compliance with these requirements in its sole discretion on a case-by-case basis.

    Application Process

    Companies interested in applying for a Strategic Growth Loan should contact NCBiotech's SGL program director listed in the Contact section below to discuss the company, its proposed project, and the application procedures. After this discussion, company representatives may be invited to the Biotechnology Center to make an initial presentation.

    Pre-Application: Once the applicant’s eligibility and general fit for the program have been established, the company may be invited to submit a pre-application describing the company’s management, technology, proposed project, budget, and source of matching funds.

    Full Application: Upon satisfactory review of the pre-application, the company may be invited to submit a full application. This application will include the company’s complete business plan, project proposal, financial statements, matching investment commitment, and other supporting documentation.

    Review and Approval: The investment team will thoroughly review the company’s application and solicit independent, third-party reviewers to help evaluate the technical and commercial merits of the proposal. Competitive applications will be presented to NCBiotech's committee of its board of directors for final review and approval.

    Application Deadlines:

    Pre-Application must be
    submitted no later than:
    And full application
    must be submitted by:
    For potential review
    by EIC in:
    November 5, 2018 December 14, 2018 March 2019
    February 4, 2019 March 11, 2019 June 2019
    May 15, 2019 June 19, 2019 September 2019
    August 7, 2019 September 9, 2019 December 2019

    Loan Terms

    The Strategic Growth Loan consists of:

    • A senior, unsecured loan with favorable terms including:
      • Five-year fixed term with balloon payment at maturity for principal and accrued interest
      • Interest rate equal to the current prime rate plus 2%
    • A warrant to purchase company stock

    Loan Disbursement

    Successful applicants will receive the loan funds according to the following schedule:

    • 50% of the loan amount at closing
    • An additional 40% upon receipt and approval of a mid-term project report
    • The final 10% upon receipt and approval of a final project report

    Mid-term and final reports include a detailed update of progress against proposed milestones (including supporting documentation) and actual spending versus budget. The Biotechnology Center will actively monitor the company’s progress until the Strategic Growth Loan is repaid in full. Periodic progress reports and occasional site visits will be required.

    Type: Loan | Category:
    Business Loans

    Strategic Growth Loan

    Maximum Award: $500,000

    Deadline: Quarterly

    Contact Kate Holt at kate_holt@ncbiotech.org with questions regarding this program or to schedule a preliminary meeting.